Deadline looms on state budget deal

JACKSON – Negotiations will begin in earnest this week on developing a $19 billion state budget to fund everything from the public schools to highway construction and maintenance to health care.

The deadline for House and Senate negotiators to reach a budget deal is Saturday night. The deadline for that budget deal to be approved by both chambers of the Legislature is the following Monday, March 31.

But before deadlines can be met, House Speaker Philip Gunn, R-Clinton, said, “We have to know what the big number is.”

The big number the first-term speaker was referring to is the final estimate of the general fund revenue that will be available to appropriate this session for the budget year that begins July 1.

As chairman of the Legislative Budget Committee this session, Lt. Gov. Tate Reeves, who presides over the Senate, will decide if and when to call a meeting of legislative leaders to increase that revenue estimate – and thus increase the amount of money available to appropriate.

REEVES

“We are looking at the revenue closely,” Reeves said. “We will make a final decision sooner rather than later.” Reeves said earlier this month that he anticipates the revenue estimate being raised.

Obviously, the Legislative Budget Committee will have to meet this week – preferably by mid-week – if the revenue estimate is to be raised, giving legislators more money to plug many needs that have arisen during the 2014 session.

For the current fiscal year, which ends June 30, revenue collections are more than $170 million over the estimate the Budget Committee adopted at the end of the 2013 session.

The state’s fiscal experts, who make a recommendation to the Legislative Budget Committee on whether to raise the estimate, have been discussing the issue. They will make a recommendation to the Budget Committee if Reeves calls a meeting.

The revenue estimate deals with the state general fund, which encompasses about $5.4 billion of the total state budget through taxes such as on income, retail items, casino earnings and corporate earnings. The general fund represents the portion of the budget where legislators have the most discretion in how they spend funds.

The rest of the $19 billion budget includes federal funds, such as the federal government’s portion of the money for Medicaid, and special funds that are collected to fund a specific agency, such as the motor fuel tax to fund the Department of Transportation or a fee on barbers to fund their regulatory agency.

The additional funds will help Reeves and other legislative leaders accomplish their stated goal of not using one-time money to fund recurring expenses. Dating back to the 1990s, legislators have typically used various sources of one-time money, which always seem to be available in differing forms, to fund ongoing expenses.

But as legislative leaders try to accomplish the goal of eliminating the use of one-time money, they will have some obstacles. For instance, both chambers have passed teacher pay raise proposals that will take a sizable chunk out of the general fund. The larger Senate version, a $1,500 across-the-board raise starting July 1, would cost the state general fund $64 million. Gunn is on record supporting the larger Senate plan for the upcoming year.

Plus, the Senate over the objections of that chamber’s leadership, has stated its intention to add another $60 million to the Mississippi Adequate Education Program funding formula for local school districts.

In both chambers, the leadership has narrowly defeated efforts to provide a state employee pay raise.

Despite beating those efforts, Gunn said that in the coming days budget negotiators would be looking at whether money can be found for a state employee pay raise.

“All of us would like to do it,” Gunn said.

A $1,000 pay raise for state employees would cost the state general fund about $39 million.

Both state employees and teachers have not had across-the-board raises since 2007. But, according to the legislative leadership, numerous state agency directors have been able to find money in their budgets to provide raises to literally thousands of employees. Information is being gathered on which employees received raises.

Another item that is expected to be dealt with in the budget is providing $6.9 million for a new trooper school. That would fund an additional 60 troopers. Officials say the Department of Public Safety is about 150 troopers short of its desired level of staffing.

It will be easier to accomplish those goals if the revenue estimate is raised. But if it is not raised, the Legislature has the option of tapping into various reserve funds or sources of one-time money totaling more than $500 million.